Formation of Offshore Companies in Hong Kong

According to Part XI of the Companies Ordinance, if a company is incorporated outside Hong Kong and it establishes a place of business in the city the offshore company must register with the Companies Registrar as an offshore company within a month of incorporation.

According to Companies Ordinance (Cap. 32), s. 341: A place of business includes any transfer of share or its registrar as well as for the purposes of manufacturing or storage of goods in that place, but excludes any non-use of the company for business(es) which create legal obligations.

If the place of business of the overseas companies / offshore companies are the places outside Hong Kong, then they need to ensure that they meet the requirement(s) of the respective jurisdiction of that districts / regions. For example, if the overseas company registers a place of business in China, that overseas company must comply with the applicable laws and regulations in China.

Regarding the establishment of overseas companies, in order to understand which laws apply, two concepts (place of registration and operation / place of business) must be clearly distinguished.

The following places are the most common places for incorporation of registered overseas companies / offshore companies:-

the British Virgin Islands (BVI)

Seychelles

Samoa

the Cayman Islands

Regulations regarding overseas companies

If these companies are not carrying on business(es) in their countries of incorporation then they usually do not need to pay the tax of that country. However, it does not mean that overseas companies are not required to pay the tax within that jurisdictions that the company's business(es) operates. This is because most of the jurisdictions have laws to regulate these offshore businesses. Therefore, think twice before establishing these overseas companies / offshore companies.

Benefits of establishing offshore companies:-

(1) Information about shareholder and director is not publicly available;

(2) No requirement to submit tax returns and the auditor's report ;

(3) No exchange control.

Deep Blue can assist with offshore company registration in Hong Kong. Contact us to learn more about our services.